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Illlquid “stock options” in a private company is not what I consider compensation.
by raw_anon_1111 10mo ago
Illlquid “stock options” in a private company is not what I consider compensation.
- ceejayoz 10mo agoThis is the general rule, but not for ones the size of OpenAI. There’s always a secondary market for prominent enough companies.
- soared 10mo agoDont all private companies require approval for secondary sales, which I assume are not ever approved?
- no_wizard 10mo agoTypically. I’d be shocked if OpenAI let employees sell their options like this without requiring approval
- htrp 10mo agoThey don't but you effectively do it under the table
- raw_anon_1111 10mo agoDo they sell at full value?
- judahmeek 10mo agoHow do you define value without an IPO?
- matt-attack 10mo agoWhatever they sell them for is the value.
- cik 10mo agoThey do, but you sell forward contracts instead. This is perfectly legal, and the approach I've seen. There are a few companies, and even funds that will engage in this, in an effort to attain future upside.
- throw-12-16 10mo agoIts pretty common, Ive personally done this.
- Eridrus 10mo agoI am sure you can make OpenAI stock liquid pretty easily.
- LunaSea 10mo agoOnly if you're allowed to which is not always the case.
- Atotalnoob 10mo agoIt’s allowed pretty easily. They had had tender events (where you can sell your private stock super easily)
- mikeyouse 10mo agoThey've changed the laws recently which makes it far easier - I believe you'd still need to be accredited but for most of HN, that's a low bar. For OpenAI specifically, they've allowed employees to participate in the funding rounds and they did a separate tender offer with Softbank to provide liquidity to early employees as well; https://fortune.com/2024/12/17/hundreds-openai-employees-10-million-payday-softbank-stock-tender-offer-details/ https://fortune.com/2024/12/17/hundreds-openai-employees-10-...
- ls612 10mo agoOpenAI has regular tender offers for their employees, so while this advice is reasonable in general it is less true for this case.
- no_wizard 10mo agoLess true isn’t the same as not true. Simply put we don’t know because it’s not what they are disclosing This article feels more like paid publicity than it does journalism
- ls612 10mo agoThe various valuations you see for OpenAI are overwhelmingly based on the prices offered for shares in their employee tender offers so I’d say for OpenAI and SpaceX at a minimum (which has a similar setup for its employees) we have a pretty good idea of what employees are getting for their equity compensation if they so choose.
- belter 10mo agoDont worry...there is always an acquisition by Meta, on the horizon for any company with nowhere to go.